Backgrounder on the Government Shutdown

October 1,2013

At midnight on October 1, the start of the new fiscal year, the U.S. government shut down due to a lapse in appropriations for FY 14. This is the first government shutdown in 17 years, with the previous one lasting for 22 days in 1995. The prospect of this shutdown had been brewing for weeks, as the House and Senate remained divided over how to pass a short-term budget plan.

Beginning on September 19, the House and Senate launched a back-and-forth battle over how to fund the government through a continuing resolution (CR) and avoid a government shutdown. The original House plan, H.R. 59, would have funded the government at an annual level of $986.3 billion through December 15, a compromised figure between the House and the Senate. Attached to this CR were provisions to withdraw funding for the implementation of the Affordable Care Act (ACA). After receiving this version of the CR in the Senate, Majority Leader Reid stripped out the defunding language and shortened the CR timeline by a month and sent back a "clean" CR to the House. This began a series of attempts to pass a resolution lasting until late Monday night. In each iteration, the House sent the Senate a CR that defunded the ACA or delayed the individual mandate, in addition to other priorities such as repealing the medical device tax and removing subsidies for Congressional staff health insurance. At every juncture, the Senate, along a party line 54-46 vote, removed this language and sent back a clean CR to the House. The Senate maintained that such defunding language was "dead on arrival" every time, and this was backed by veto threats by the President. However, House leadership was unable to convince some members of the House that they should shift their fight to the looming debt ceiling debate, and allow a clean CR to pass the House of Representative. As a result, Speaker Boehner repeatedly sent CRs to the Senate that Majority Leader Reid stated would never pass.

In a last effort, less than two hours before midnight last night the House attempted to appoint conferees to negotiate with the Senate over the stop-gap spending bill. The Senate remained adamant that the best option forward was through a clean CR, and refused to negotiate on the Affordable Care Act. The Senate formally defeated the motion to go to conference with the House earlier this morning.

The length of this shutdown is still unknown. Republicans and Democrats in both chambers are currently seeking to spin the shutdown by blaming the other side for an unwillingness to reach a reasonable compromise. The Office of Management and Budget issued a memo last night directing agency heads to execute an orderly shutdown, including the HHS contingency plan. We will continue to monitor any developments and will provide updates once the length or conclusion of the government shutdown becomes clear.